What this calculator does
This tool works out the gross (pre-tax) salary you need to earn so that, after tax, you're left with enough to cover your monthly expenses. Because part of every paycheck goes to tax, your salary has to be higher than your spending — this calculator "grosses up" your expenses so you can target the right income.
How to use it
Enter your total monthly expenses (rent or mortgage, food, transport, bills, savings goals and discretionary spending), then enter your effective tax rate as a percentage. The result shows the gross salary you'd need per year and per month, plus how much of that goes to tax.
The formula explained
The core relationship is:
$$\text{Required Gross Salary} = \frac{\text{Monthly Expenses} \times 12}{1 - \dfrac{\text{Tax Rate (\%)}}{100}}$$
Multiplying monthly expenses by 12 gives your annual net need. Dividing by \((1 - \text{tax rate})\) accounts for the fact that you only keep the after-tax fraction of your pay. For example, at a 20% tax rate you keep 80%, so you must earn your net need divided by \(0.80\).
Worked example
Suppose your monthly expenses are $2,500 and your effective tax rate is 20%. Annual expenses are \(2{,}500 \times 12 = \$30{,}000\). Dividing by \((1 - 0.20) = 0.80\) gives a required gross salary of $37,500 per year, or $3,125 per month. Of that, about $7,500 goes to tax each year.
FAQ
What tax rate should I use? Use your effective (average) tax rate — total tax divided by gross income — not your top marginal bracket, for the most accurate result.
Should I include savings in my expenses? Yes, if you want your salary to fund both spending and savings, include your target monthly savings in the expenses figure.
Does this account for deductions like retirement contributions? No. It uses a single combined tax rate; for precise planning, fold other paycheck deductions into your effective rate.
